Levinson Litany Blasts HME, Touts 13-Month Oxygen Cap
WASHINGTON — At a congressional hearing on health care
reform vis-a-vis fraud and abuse, HHS Inspector General Daniel Levinson blasted
the HME industry and leveled another shot at already-struggling
oxygen providers, recommending a 13-month cap.
“OIG has an extensive body of work identifying Medicare fraud,
waste and abuse related to DME. Problems include DME suppliers
circumventing enrollment and billing controls, high payment error
rates, kickbacks and excessive reimbursement rates for certain
DME,” Levinson testified Thursday before the House Energy and
Commerce Subcommittee on Health.
In a statement submitted to the committee, which held a series
of hearings on the House
“discussion draft” health reform bill last week, Levinson laid
out a litany of his office’s previous investigations into power
wheelchairs, home oxygen equipment and negative pressure wound
therapy devices, among others.
In 2004, Levinson said, OIG estimated that Medicare paid $96
million for PWC claims that did not meet coverage criteria for any
type of wheelchair or scooter and “overspent an additional $82
million for claims that could have been billed using a code for a
less expensive mobility device.”
In 2006, an OIG report found that Medicare had allowed an
average $7,215 for rental of an oxygen concentrator “that costs
approximately $600 to purchase new … We determined that if
home oxygen payments were limited to 13 months rather than the
current 36 months, Medicare and its beneficiaries would save $3.2
billion over five years,” Leivnson told the committee.
And in March of this year, OIG reported that Medicare reimbursed
suppliers for negative pressure wound therapy pumps based on a
purchase price of more than $17,000 when “suppliers paid, on
average, approximately $3,600 for new models.”
“Though the vast majority of health care providers and suppliers
are honest and well intended, even a small percentage of providers
and suppliers intent on defrauding the programs can have
significant detrimental effects,” Levinson said, noting previous
OIG recommendations to CMS to strengthen enrollment safeguards and
“align Medicare reimbursement for DME more closely with widely
available market prices.”
The scorching testimony couldn’t have come at a worse time,
according to the American Association for Homecare’s Michael
Reinemer, vice president, communications and policy. The
association is looking for congressional support of an oxygen
benefit overhaul, with a bill to come from Reps. Mike Ross, D-Ark.,
and Kendrick Meek, D-Fla.
But Wall Street analysts reported last week that the Senate
Finance Committee, which has yet to unveil its health care reform
bill, is considering deep cuts to oxygen as one way to offset
health reform costs.
“Two problems with the testimony are first, the data and the
conclusions about oxygen are wrong, and second, the timing is
terrible,” Reinemer said.
“With respect to oxygen, this testimony focuses on the
thoroughly discredited 2006 OIG study,” he said. That study did not
reflect the services involved in providing home oxygen, the
association has argued. (See AAHomecare Calls OIG Report
Deeply Flawed, HomeCare, October 2006.)
“Further cuts to oxygen are already a looming threat in some
quarters on Capitol Hill,” Reinemer continued. “This picture of
home oxygen therapy — described as merely a piece of
equipment — distorts the true character and essential
services connected to this Medicare benefit, and it perpetuates the
worst myths.”
What’s more, Reinemer said, “because of its disproportionate
focus on pricing and fraud issues connected to the HME sector, this
OIG testimony harms the entire HME community including all the
good, law-abiding providers of power wheelchairs and medical
supplies.”
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